Treasuries Close Sharply Higher Following Monthly Jobs Report

(RTTNews) - Treasuries moved sharply higher over the course of the trading day on Friday on the heels of the release of the monthly employment report.

After showing a strong upward move in early trading, bond prices saw some further upside as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 10.3 basis points to 2.86 percent.

With the steep drop, the ten-year yield pulled back further off the two-year closing high set on New Year's Eve and hit its lowest closing level in almost a month.

The rally by treasuries came following the release of a report from the Labor Department showing that U.S. employment rose by much less than expected in the month of December.

The report said non-farm payroll employment edged up by 74,000 jobs in December compared to economist estimates for an increase of about 200,000 jobs.

The job growth in December reflects a substantial slowdown from the upwardly revised increase of 241,000 jobs in November.

Bad weather during the month likely contributed to the weaker than expected job growth, as the Labor Department said 273,000 people were not able to work because of the weather, the most since 1977.

While the report also showed that the unemployment rate unexpectedly fell to a new five-year low of 6.7 percent, the drop was largely due to a decrease in the size of the labor force as some unemployed people gave up looking for work.

The weaker than expected job growth eased concerns that the Federal Reserve will accelerate its tapering of bond purchases.

Chris Low, chief economist at FTN Financial, "The bond market has rallied across the curve as traders dismiss the likelihood of faster tapering and faster tightening."

Traders will be presented with a slew of U.S. economic data next week, with reports on retail sales, housing starts and industrial production likely to be in focus.